Q3 2025 Thryv Holdings Inc Earnings Call

October 30, 2025

Operator: After today's prepared remarks, we will host a question and answer session. If you would like to ask a question, please raise your hand. If you've dialed in to today's call, please press star nine to raise your hand and star six to unmute your line when prompted. I will now hand the conference over to Cameron Lessard, Vice President of Corporate Development and Strategy. Please go ahead.

Operator: After today's prepared remarks, we will host a question-and-answer session. If you would like to ask a question, please raise your hand. If you've dialed into today's call, please press star nine to raise your hand and star six to unmute your line when prompted. I will now hand the conference over to Cameron Lessard, Vice President of Corporate Development and Strategy. Please go ahead.

Cameron Lessard: Good morning, and thank you for joining us for Thryv Holdings' Q3 2025 Earnings Conference Call. With me today are Joe Walsh, Chairman and Chief Executive Officer, and Paul Rouse, Chief Financial Officer. During this call, we will make forward-looking statements that are subject to various risks and uncertainties. Actual results may differ materially from these statements. A discussion of these risks and uncertainties is included in our earnings release and SEC filings. Today's presentation will also include non-GAAP financial measures, which should be considered in addition to, but not as a substitute for, our GAAP results. Reconciliations of these measures can be found in our earnings release. As a reminder, on this call, SaaS revenue reflects the combined performance of Thryv and Keap. We will only specify Keap's performance when discussing its revenue contribution for the quarter and fiscal year.

Cameron Lessard: Good morning, and thank you for joining us for Thryv Holdings, Third Quarter 2025 earnings conference call. With me today are Joe Walsh, Chairman and Chief Executive Officer, and Paul Rouse, Chief Financial Officer. During this call, we will make forward-looking statements that are subject to various risks and uncertainties. Actual results may differ materially from these statements. A discussion of these risks and uncertainties is included in our earnings release and SEC filings. Today's presentation will also include non-GAAP financial measures, which should be considered in addition to, but not as a substitute for, our GAAP results. Reconciliations of these measures can be found in our earnings release. As a reminder, on this call, SaaS revenue reflects the combined performance of Thryv and Keap. We will only specify Keap's performance when discussing its revenue contribution for the quarter and fiscal year.

Cameron Lessard: With that, I'll turn the call over to Joe Walsh, Chairman and CEO. Joe?

Joe Walsh: Thank you, Cameron, and good morning, everyone. I'd like to give you an update on our business transformation, some of the progress that we're making, and then Paul will take you through this quarter's numbers after that. First thing I want to do is update you on our Grow Conference. Two weeks ago, we had out in Arizona a small business growth conference. It was broken into two pieces. The first couple of days were a partner conference. A lot of the partners that both Keap and Thryv have, which is really now one partner community. I have to tell you, when we first met them a year ago, they were a little bit angry.

Joe Walsh: Thank you, Cameron. Good morning, everyone. I'd like to give you an update on our business transformation, some of the progress that we're making. Paul will take you through this quarter's numbers after that. First thing I want to do is update you on our Grow Conference. Two weeks ago, we had out in Arizona a small business growth conference. It was broken into 2 pieces. The first couple days were a partner conference. A lot of the partners that both Keap and Thryv have, which is really now 1 partner community. I have to tell you, when we first met them a year ago, they were a little bit angry.

Joe Walsh: They were saying, we've not been invested in enough by the prior ownership of Keap, and we feel like you owe us certain deliverables. I must say our partner results this year have been okay, but they've not been the kind of big lift that we were looking for. We worked really hard with these partners to figure out what kind of updates they need, what kind of partner portal they need, what kind of REST API updates, what kind of product improvements, and which things really mattered. We've delivered a lot for them. This partner update was like Christmas, us delivering on the value that they were looking for. I have better expectations as we go into 2026. I think these partners are pretty impressed at the pace at which we are delivering and innovating software. That was great.

Joe Walsh: They were saying, you know, we've not been invested in enough by the prior ownership of Keap, and, you know, we feel like you owe us certain deliverables. I must say our partner results this year have been okay, but they've not been the kind of big lift that we were looking for. We worked really hard with these partners to figure out what kind of updates they need, what kind of partner portal they need, what kind of REST API updates, what kind of product improvements, and which things really mattered, and we've delivered a lot for them. This partner update was like Christmas, us delivering on the value that they were looking for. I have better expectations as we go into 2026.

Joe Walsh: I think these partners are pretty impressed at the pace at which we are delivering and innovating the software. That was great. The second part of the conference was small businesses. Hundreds of small businesses came in. Obviously, some existing customers came to learn more about how to use the tools, but I was surprised at how many prospective customers came. Customers that are, in some cases, are on some other tool or aren't on any tool, who came to learn more about how to market their business. We presented to them a really simple growth model of market, sell, and grow, and showed them how particularly Marketing Center can give them the foundation for growth. You know, Marketing Center is our fastest-selling product. It's really become the tip of the spear for us as we've settled in on this kind of market sell growth strategy.

Joe Walsh: The second part of the conference was small businesses. Hundreds of small businesses came in. Obviously, some existing customers came to learn more about how to use the tools, but I was surprised at how many prospective customers came. Customers that, in some cases, are on some other tool or are not on any tool, who came to learn more about how to market their business. We presented to them a really simple growth model of market, sell, and grow, and showed them how particularly Marketing Center can give them the foundation for growth. Marketing Center is our fastest selling product. It's really become the tip of the spear for us as we've settled in on this kind of market, sell, grow strategy. It really gives you all the good hygiene. It gets your listings managed all across the web.

Joe Walsh: It really gives you all the good hygiene. It gets your listings managed all across the web. It gives you a well-built website that's not only search engine optimized, but it's answer engine optimized, which is really important because the answer engines are gaining share every day. We've built the knowledge graph on these sites, and we're continually tweaking the sites to make sure that they're really answer engine friendly and bringing you up high on those results. That's been, you know, really big as well. When you have a Marketing Center, you have call tracking numbers, so you can track results everywhere, online, offline. You can figure out the truck wrap that you have, does that pull calls? The yard sign you have in front of the job that you're doing. When you're doing stuff in social, how is that pulling?

Joe Walsh: It gives you a well-built website that's not only search engine optimized, but it's answer engine optimized, which is really important because the answer engines are gaining share every day. We've built the knowledge graph on these sites, and we're continually tweaking the sites to make sure that they're really answer engine friendly and bringing you up high on those results. That's been really big as well. When you have a Marketing Center, you have call tracking numbers, so you can track results everywhere, online, offline. You can figure out the truck wrap that you have. Does that pull calls? The yard sign you have in front of the job that you're doing. When you're doing stuff in social, how is that pulling? You can even look at one social sort of personality versus another and what's pulling the best.

Joe Walsh: You can even look at one social, you know, sort of personality versus another and what's pulling the best. If you're running search campaigns, you can track everything. What we're finding is a lot of people are using Marketing Center, even if they're using someone else's CRM. They might be on one of our sort of competitor CRMs, using Marketing Center in order to manage their marketing because it's the best thing available in the market. We're pretty excited about the progress we're making there. The Grow Conference was really a confirmation that these small businesses want to get their marketing right. They really want to find a way to be found and consistently measure what's working. We're excited about that. We were also able to update the attendees on the AI developments that we've experienced.

Joe Walsh: If you're running search campaigns, you can track everything. What we're finding is a lot of people are using Marketing Center, even if they're using someone else's CRM, that they might be on one of our sort of competitor CRMs and then using Marketing Center in order to manage their marketing because it's the best thing available in the market. We're pretty excited about the progress we're making there. The Grow Conference was really a confirmation that these small businesses want to get their marketing right. They really want to find a way to be found and consistently measure what's working. We're excited about that. We were also able to update the attendees on the AI developments that we've experienced. We're rolling out lots of AI within the software.

Joe Walsh: You know, we're rolling out lots of AI within the software. We've got social captioning where when you do social posts, it can help you write that social post in your personality. If you are posting a photo, it can help you caption that, suggest several captions. You can pick the one that you think works the best. Review response is a big deal because lots of these small businesses have a tough time keeping up with reviews.

Joe Walsh: We've got social captioning where when you do social posts, it can help you write that social post in your personality. If you are posting a photo, it can help you caption that, suggest several captions, and you can pick the one that you think works the best. Review response is a big deal because lots of these small businesses have a tough time keeping up with reviews. The software goes and finds the review, brings it to you, makes sure you don't miss it, and suggests several review responses. You can just pick the one in the middle or the one that you think is the best voice for you, and it posts it, and it's all taken care of. You don't have to kind of make a sticky note to remember to do it. It's all happening in real time.

Joe Walsh: The software goes and finds the review, brings it to you, makes sure you don't miss it, and suggests several review responses, and you can just pick the one in the middle or, you know, the one that you think is the best voice for you, and it posts it, and it's all taken care of, and you don't have to kind of make a sticky note to remember to do it. It's all happening in real time. Your listings. It is helping you with everything, with service descriptions. You know, if you've got a new area of your business or something, you can use the AI to help you write a very professional service description of what you do, so that, you know.

Joe Walsh: Your listings, it is helping you with everything, with service descriptions. If you've got a new area of your business or something, you can use the AI to help you write a very professional service description of what you do so that not all of our customers are the best wordsmithers, so it kind of gives them a more polished face. Everything to do with websites. We've got obviously a service that we provide as a company to build big, powerful websites for customers, sometimes they don't need all that. We've got a simple AI website builder now. It'll be out in a couple of weeks that will allow a small business to come in and just spin up a quick website using AI. Copywriting assistant.

Joe Walsh: Not all of our customers are the best wordsmiths, so it kinda gives them a more polished space. Everything to do with websites. You know, we've got a obviously a service that we provide as a company to build big, powerful websites for customers. Sometimes they don't need all that. We've got a simple AI website builder now, it'll be out in a couple of weeks, that will allow a small business to come in and just spin up a quick website, using AI. Copywriting assistant. You know, when you're sitting there and you're doing any kind of copywriting for landing pages or trying to build a little email campaign, we've got that built right into the tool where that's happening. You've got call analysis.

Joe Walsh: When you're sitting there and you're doing any kind of copywriting for landing pages or trying to build a little email campaign, we've got that built right into the tool where that's happening. You've got Call Analysis. This is something we've had in beta for a little while. It's working really well where it takes your calls and actually gives you a transcript of the inbound call, and then does lead scoring on it. I was talking to one of our partners at the conference who was in on the beta, and he was telling me about a dentist that he has out in the Pacific Northwest who, over a two-day period of time, got 27 leads. He got a full transcript of the entire call, and they were all lead scored. The dentist was just dumbfounded.

Joe Walsh: This is something we've had in beta for a little while, it's working really well, where it takes your calls and actually gives you a transcript of the inbound call, and then does lead scoring on it. I was talking to one of our partners at the conference who was in on the beta, and he was telling me about a dentist that he has out in the Pacific Northwest, who over a two-day period of time got 27 leads. He got a full transcript of the entire call, and they were all lead scored. The lead was the dentist was just dumbfounded. He said, I can't believe this. You know? That this 27 leads, and you know, they're scored, all the details. The partner said, Hey, this is the beginning. This is the future.

Joe Walsh: He said, I can't believe this, that there's 27 leads, and they're scored, all the details. The partner said, Hey, it's just the beginning. This is the future. This is what these guys are delivering. Really excited about the lead scoring and call analysis. AI is being used throughout the product to make it easier for small business people, kind of meet them where they are. Obviously, AI is doing a lot internally for us as a company. All the fulfillment that we're doing where we're building sites, doing social, we're using AI to amplify our productivity. Our legal department uses it. We're using it in accounting. We're using it all over the company. You've probably heard from other businesses that they're finding meaningful efficiency there.

Joe Walsh: This is what these guys are delivering. Really excited about the lead scoring and call analysis. AI is being used throughout the product to make it easier for small business people, kind of meet them where they are. Obviously, AI is doing a lot internally for us as a company. A lot of the fulfillment that we're doing, where we're building sites, doing social, we're using AI to amplify our productivity. Our legal department uses it. We're using it in accounting. We're using it all over the company. You know, you've probably heard from other businesses that they're finding, you know, meaningful efficiency there. Maybe most importantly, in our software development team.

Joe Walsh: Maybe most importantly, in our software development team, they're using all the latest tools to amplify and speed up the roadmap of development, and obviously using AI for QA, trying to make sure that the quality is there and speed up the process of finding if there are any bugs, get to the bottom line, get it sorted, and get them squared away. AI has been a big lift for us. It's been a big part of our progress that we've made this year. I really feel as though the availability of AI in the software is a big tailwind for us as we go into next year. Really excited about that.

Joe Walsh: You know, they're using all the latest tools to amplify and speed up the roadmap of development, and then obviously using AI for QA, trying to make sure that the quality is there and speed up the process of finding if there are any bugs, get to the bottom line, get it sorted and get them squared away. AI has been a big lift for us. It's been a big part of our progress that we've made this year, and really feel as though the availability of AI in the software is a big tailwind for us as we go into next year. Really excited about that. I've got a couple other comments to make later, but I know you're anxious to hear the numbers. Let's turn it over to Paul, and let Paul take you through the numbers.

Joe Walsh: I've got a couple of other comments to make later, but I know you're anxious to hear the numbers, so let's turn it over to Paul and let Paul take you through the numbers. Paul?

Joe Walsh: Paul?

Cameron Lessard: Thanks, Joe. Let's dive into the numbers. SaaS reported revenue was $115.9 million in the third quarter, representing an increase of 33% year over year. Keep contributed $16.8 million in the third quarter. Excluding Keep, Thryv SaaS business grew 14% year over year. SaaS adjusted gross margin increased 80 basis points year over year, reaching 73%. In the third quarter, SaaS adjusted EBITDA increased to $19.6 million, exceeding guidance and resulting in an adjusted EBITDA margin of 17%. We ended the third quarter with 103,000 SaaS subscribers, including 13,000 from Keep, representing a 7% increase year over year. With a large established customer base now in place, our focus is on increasing spend per customer by driving adoption of more products and solutions, especially among our high-value clients and larger businesses. This approach meaningfully expands SaaS lifetime value and is a more efficient driver of profitability.

Paul Rouse: Thanks, Joe. Let's dive into the numbers. SaaS reported revenue was $115.9 million in Q3, representing an increase of 33% year over year. Keap contributed $16.8 million in Q3. Excluding Keap, Thryv SaaS business grew 14% year over year. SaaS adjusted gross margin increased 80 basis points year over year, reaching 73%. In Q3, SaaS adjusted EBITDA increased to $19.6 million, exceeding guidance and resulting in an adjusted EBITDA margin of 17%. We ended Q3 with 103,000 SaaS subscribers, including 13,000 from Keap, representing a 7% increase year over year. With a large established customer base now in place, our focus is on increasing spend per customer by driving adoption of more products and solutions, especially among our high-value clients and larger businesses.

Paul Rouse: This approach meaningfully expands SaaS lifetime value and is a more efficient driver of profitability. In Q3, overall SaaS ARPU reached $365, with Thryv at $355 up sequentially, and Keap ARPU remaining strong at $437. Seasoned NRR declined to 94% this quarter, primarily reflecting noise introduced as we transition legacy digital marketing services clients onto our modern SaaS platform. As we systematically wind down older tech platforms on our marketing services side, we are upgrading clients to our current software offerings while honoring their previously committed pricing, vastly improving the value they receive by introducing a wave of smaller accounts into our base, which temporarily impact ARPU at the time. These accounts from our Q3 2023 migration are now cycling into the seasoned NRR calculation after crossing the 12-month threshold.

Cameron Lessard: In the third quarter, overall SaaS ARPU reached $365, with Thryv at $355, up sequentially, and Keap ARPU remaining strong at $437. Seasoned NRR declined to 94% this quarter, primarily reflecting noise introduced as we transition legacy digital marketing services clients onto our modern SaaS platform. As we systematically wind down older tech platforms on our Marketing Services side, we are upgrading clients to our current software offerings while honoring their previously committed pricing, vastly improving the value they receive, but introducing a wave of smaller accounts into our base, which temporarily impact ARPU at the time. These accounts from our Q3 2023 migration are now cycling into the seasoned NRR calculation after crossing the 12-month threshold. The performance we're seeing from this group is consistent with the minimal initial commitments and lower propensity to expand spend compared to our higher quality software clients.

Paul Rouse: The performance we're seeing from this group is consistent with their minimal initial commitments and lower propensity to expand spend compared to our higher quality software clients. This is all part of our broader business transformation, and while some SaaS metrics will show temporary noise during this transition. We are making steady progress building a solid software client base with strong underlying fundamentals. Multi-product adoption continues to accelerate in Q3. Clients with 2 or more SaaS products grew to 17,000 or 20% of our base, compared to 15,000 or 16% a year ago. Thryv centers per client was 15% at the end of Q3, compared to 12% in the prior year. Moving over to marketing services, Q3 revenue was $85.7 million and above guidance.

Cameron Lessard: This is all part of a broader business transformation. While some SaaS metrics will show temporary noise during this transition, we are making steady progress building a solid software client base with strong underlying fundamentals. Multi-product adoption continues to accelerate in the third quarter. Clients with two or more SaaS products grew to 17,000 or 20% of our base compared to 15,000 or 16% a year ago. Thryv centers per client was 15% at the end of the third quarter compared to 12% in the prior year. Moving over to Marketing Services, third quarter revenue was $85.7 million and above guidance. Third quarter Marketing Services adjusted EBITDA was $21.2 million, resulting in an adjusted EBITDA margin of 25%. As anticipated, this quarterly performance is subject to the dynamics of the print schedule, which performed better than expected and returned to normalized levels starting in the second quarter.

Paul Rouse: Q3 marketing services adjusted EBITDA was $21.2 million, resulting in an adjusted EBITDA margin of 25%. As anticipated, this quarterly performance is subject to the dynamics of the print schedule, which performed better than expected and returned to normalized levels starting in Q2. Q3 marketing services billings totaled $70.6 million, down 33% year-over-year, reflecting the intentional shift in our strategy. As we continue to initiate upgrades of the legacy digital marketing services products for clients to our SaaS platform, the decline will persist but at a managed pace. We remain on track to exit marketing services by 2028, with cash flows lasting through 2030, ensuring strong liquidity as we fully transform to a pure-play software business.

Cameron Lessard: Third quarter Marketing Services billings totaled $70.6 million, down 33% year over year, reflecting the intentional shift in our strategy. As we continue to initiate upgrades of the legacy digital Marketing Services products for clients to our SaaS platform, the decline will persist, at a managed pace. We remain on track to exit Marketing Services by 2028, with cash flows lasting through 2030, ensuring strong liquidity as we fully transform to a pure-play software business. Total company billings were $184.2 million, down just 4% year over year, underscoring the company's steady progress as it transforms into a leading SaaS business, and positions itself to stabilize total revenue and return to sustainable growth. In the third quarter, we generated free cash flow of $14.6 million, which brings the year-to-date free cash flow to $18.8 million.

Paul Rouse: Total company billings were $184.2 million, down just 4% year-over-year, underscoring the company's steady progress as it transforms into a leading SaaS business and positions itself to stabilize total revenue and return to sustainable growth. In Q3, we generated free cash flow of $14.6 million, which brings the year-to-date free cash flow to $18.8 million. We ended Q3 with net debt down $9 million to $265 million, bringing our leverage ratio to 1.9x. Turning to our outlook for 2025. For Q4, we expect SaaS revenue in the range of $118 to 121 million. For the full year, we are updating our SaaS revenue to a range of $460 to 463 million.

Cameron Lessard: We ended the third quarter with net debt down $9 million to $265 million, bringing our leverage ratio to 1.9x. Turning to our outlook for 2025, for the fourth quarter, we expect SaaS revenue in the range of $118 million to $121 million. For the full year, we are updating our SaaS revenue to a range of $460 million to $463 million. For the fourth quarter, we expect SaaS adjusted EBITDA in the range of $19.2 million to $21.2 million. For the full year, we are raising SaaS adjusted EBITDA guidance to a range of $73 million to $75 million. For the full year, we expect Marketing Services revenue in the range of $323 million to $325 million. For the full year, we are updating Marketing Services adjusted EBITDA guidance to a range of $76 million to $78 million. Now, back to Joe.

Paul Rouse: For Q4, we expect SaaS adjusted EBITDA in the range of $19.2 to 21.2 million. For the full year, we are raising SaaS adjusted EBITDA guidance to a range of $73 to 75 million. For the full year, we expect marketing services revenue in the range of $323 to 325 million. For the full year, we are updating marketing services adjusted EBITDA guidance to a range of $76 to 78 million. Now back to Joe.

Joe Walsh: Thanks, Paul. I'd like to talk a little bit about our vertical initiative. We talked earlier this year about our HVAC vertical. We had taken the Keap automation tools and Thryv Marketing Center and kind of packed them together and created these really interesting vertical applications. The first one that we applied was to HVAC. You know, I was recently talking to the kind of the pilot or pioneer customer on that, and they have been really pleased. They've gotten a very strong response from what we put in place. I just wanna give you some sense of the statistics that they've given us. They've had around a 10% lift in jobs booked, a 25% increase in total revenue.

Joe Walsh: Thanks, Paul. I'd like to talk a little bit about our vertical initiative. We talked earlier this year about our HVAC vertical. We had taken the Keap automation tools and Thryv Marketing Center and kind of packed them together and created these really interesting vertical applications. The first one that we applied was to HVAC. I was recently talking to kind of the pilot or pioneer customer on that, and they have been really pleased. They've gotten a very strong response from what we put in place. I just want to give you some sense of the statistics that they've given us. They've had around a 10% lift in jobs booked, a 25% increase in total revenue.

Joe Walsh: They're generating 50-plus qualified leads every month, and they're seeing an increase in repeat business, about 12% increase in repeat business because the automations have automated reminders that are reaching out and tickling their customers and saying, "Hey, you know, what about this? What about that?" It's stimulating business out of their base. They also had felt as though they weren't as good at social media as they'd like to be, that you could put almost any small business in that category. They've seen a 45% boost in engagement in their social tools and what they're doing with social. They are really happy campers. We've had very strong sales within our HVAC vertical, and we're now about to roll out a broader home services vertical that gets at more of the home improvement type broader categories.

Joe Walsh: They're generating 50-plus qualified leads every month, and they're seeing an increase in repeat business, about a 12% increase in repeat business because the automations have automated reminders that are reaching out and tickling their customers and saying, Hey, what about this? What about that? It's stimulating business out of their base. They also had felt as though they weren't as good at social media as they'd like to be. You could put almost any small business in that category. They've seen a 45% boost in engagement in their social tools and what they're doing with social. They are really happy campers. We've had very strong sales within our HVAC vertical, and we're now about to roll out a broader home services vertical that gets at more of the home improvement type broader categories. We've got a bunch queued up behind that.

Joe Walsh: We've got a bunch queued up behind that. The model that we used where we use the automations, customize them around the vertical, is, I think a terrific model. I wanna say one other thing, just for those of you that are thinking about how we fit in the market and our competition and all that. This customer I've just described in detail how happy they are with Marketing Center, they are a ServiceTitan customer. This is a very big HVAC company with tons and tons of trucks on the road, and they are a ServiceTitan customer. ServiceTitan tracks the Freon and the wing nuts and where the trucks are, and we handle the marketing. That paradigm, I think, is increasingly building where people are using some, you know, really deep vertical CRM and then using our, you know, our tool for the marketing.

Joe Walsh: The model that we used, where we use the automations, customize them around the vertical, is, I think, a terrific model. I want to say one other thing, just for those of you that are thinking about how we fit in the market, our competition, and all that. This customer I've just described in detail, how happy they are with Marketing Center. They are a ServiceTitan customer. This is a very big HVAC company with tons and tons of trucks on the road, and they are a ServiceTitan customer. ServiceTitan tracks the freon, the wing nuts, and where the trucks are, and we handle the marketing. That paradigm, I think, is increasingly building where people are using some really deep vertical CRM and then using our tool for the marketing. We do have a CRM. Our CRM is more horizontal.

Joe Walsh: You know, we do have a CRM. Our CRM is more horizontal. We haven't, you know, done as much down, deep down in the verticals. When you get to a larger, more sophisticated business, they often are using one of these, you know, in-industry CRMs. That's fine with us. We're agnostic about that. Our Marketing Center fits perfectly in with that, and we've got a lot of integrations, and we're adding more all the time. I want to just say that one of the pieces of this transformation journey that's happening, as our software platform is building out now and becoming more complete, we're beginning to move up market. Well, Joe, your ARPU has been bouncing around. It has bounced around because we've been converting legacy marketing services people off of platforms.

Joe Walsh: We haven't done as much deep down in the verticals. When you get to a larger, more sophisticated business, they often are using one of these in-industry CRMs. That's fine with us. We're agnostic about that. Our Marketing Center fits perfectly in with that. We've got a lot of integrations, and we're adding more all the time. I want to just say that one of the pieces of this transformation journey that's happening, as our software platform is building out now and becoming more complete, we're beginning to move up market. Now, you might say, well, Joe, your ARPU has been bouncing around. It has bounced around because we've been converting legacy Marketing Services people off of platforms.

Joe Walsh: In some cases, they came in at pretty low billing numbers because we were looking to just shut down a platform, and we allowed them to come over, and we kind of grandfathered in their preferable rate that they'd had in the past. In terms of what we're selling, we're moving from that $4,000 to $8,000 at a very rapid clip. Our U.S. field sales force is selling up in the $6,000 range with the run rate sales that they're making every day. As we build products, as we're focusing our marketing initiatives, it's all moving up market. Up market has been a big deal.

Joe Walsh: In some cases, they came in at pretty low billing numbers because we were looking to just shut down a platform, we allowed them to come over, and we kind of grandfathered in their preferable rate that they've had in the past. In terms of what we're selling, we're moving from that $4,000 to $8,000 in a very rapid clip. Our US field sales force is selling up in the $6,000 range with the run rate sales that they're making every day. As we build products, as we're focusing our marketing initiatives, it's all moving up market. Up market has been a big deal. One of the things we've been looking at lately to try to help investors understand that is we've been looking at the $400 and up a month segment, which is growing steadily and strongly and has grown very predictably.

Joe Walsh: One of the things we've been looking at lately to try to help investors understand that is we've been looking at the $400 and up a month segment, which is growing steadily and strongly, and has grown very predictably. These customers have very good retention metrics. We make good margins on those customers. It helps sort of weed out the noise that's there with some of the smaller customers that have come in through these conversions. We'll talk about that more in the future, but our transformation as a business is continuing at a nice pace. As my last comment here, I wanna mention Sean Wechter, our new Chief Technology Officer. I think his middle name could potentially be AI. He is all AI all the time.

Joe Walsh: These customers have very good retention metrics. We make good margins on those customers, and it helps sort of weed out the noise that's there with some of the smaller customers that have come in through these conversions. We'll talk about that more in the future, but our transformation as a business is continuing at a nice pace. As my last comment here, I want to mention Sean Weckter, our new Chief Technology Officer. I think his middle name could potentially be AI. He is all AI all the time. We're really excited about what we think we can do with Sean in the year ahead to really up-level even further our integration of AI and our pace of throughput through our engineering team. Really excited to welcome Sean to the company, and I'll stop there and turn it over to questions. Operator?

Joe Walsh: We're really excited about what we think we can do with Sean in the year ahead to really up-level even further our integration of AI and our pace of throughput through our engineering team. Really excited to welcome Sean to the company and I'll stop there and turn it over to questions. Operator?

Operator: Thank you. We will now begin the question and answer session. Please limit yourself to one question and one follow-up. If you would like to ask a question, please raise your hand now. Please stand by while we compile the Q&A roster. Your first question comes from the line of Scott Berg with Needham & Company. Your line is open. Please unmute yourself, sir.

Scott Berg: Hi, everyone. Thanks for taking my questions here. Joe, I wanted to start off on the SaaS business. Obviously growth remains reasonably strong, but you did miss your guidance in the quarter on a very minimal amount, but did come in at the very low end of the range. Help us understand kind of what's happening, whether it's on the new sales side or the expansion side to kind of drive the results versus your expectations 90 days ago. Thanks.

Scott Berg: Hi, everyone. Thanks for taking my questions here. Joe, I wanted to start off on the SaaS business. Obviously, growth remains reasonably strong, but you did miss your guidance in the quarter on a very minimal amount, but did come in at the very low end of the range. Help us understand kind of what's happening, whether it's on the new sales side or the expansion side, to kind of drive the results versus your expectations 90 days ago. Thanks.

Joe Walsh: I mean, as you say, we are making really good progress transforming, you know, what used to be a phone book business into a SaaS software business. There's a lot of execution involved and, you know, our execution wasn't flawless in this quarter. You know, you guys often ask me about the macro and, you know, whether that's the economy. I can't blame anything outside at all. You know, our execution just wasn't, you know, a smidge shy of where we wanted to be. I think we are doing the things that we need to make sure we continue to execute even better going forward. I don't think there's any big message or any big trend here. You know, we just didn't deliver it perfectly.

Joe Walsh: Yeah. I mean, look, as you say, we are making really good progress transforming what used to be a phone book business into a SaaS software business. There is a lot of execution involved, and our execution was not flawless in this quarter. You guys often ask me about the macro and whether it is the economy. I cannot blame anything outside at all. Our execution just was a smidge shy of where we wanted to be. I think we are doing the things that we need to to make sure we continue to execute even better going forward. I do not think there is any big message or any big trend here. We just did not deliver it perfectly, but I do not have any complaints about the market or anything like that.

Joe Walsh: I don't have any complaints about the market or anything like that.

Scott Berg: Yeah. Then in your pre-scripted remarks, Joe, you had talked about how I'll paraphrase, partner results have been just kind of okay to date, maybe relative to your expectations. How do you, I guess, how do you improve some of that partner opportunity with the with the with the Keap ecosystem that that you all obviously brought over? Is this purely just a function of the additional innovation that you spoke about with some more time with these partners? Or as you've had a chance to kind of work with them the last 9 months or so, have you been able to find anything else differently maybe that you have to implement in your strategies there to maybe leverage that ecosystem even more?

Scott Berg: In your pre-scripted remarks, Joe, you had talked about how, I'll paraphrase, partner results have been just kind of okay to date, maybe relative to your expectations. How do you, I guess, how do you improve some of that partner opportunity with the Keap ecosystem that you all obviously brought over? Is this purely just a function of the additional innovation that you spoke about with some more time with these partners, or as you've had a chance to kind of work with them the last nine months or so, have you been able to find anything else differently, maybe, that you have to implement in your strategies there to maybe leverage that ecosystem even more?

Joe Walsh: Yes, Scott. I mean, you know the old Infusionsoft Keap really well, and they had primarily built their business through the partner channel. They used to have those really gigantic ICON conferences with over 2,000 people, and it was partner-driven. Then under some different leadership and ownership or whatever, they sort of pivoted away from partner and attempted to try to build a more down-market direct channel for a few years. The partners felt neglected. When we showed up at the initial Grow Conference, which was days after we made the acquisition, I had a line of partners wanting to basically not yell at me, but pretty close and say, we've been neglected for years.

Joe Walsh: Yes, Scott. I mean, you know the old Infusionsoft Keap really well. You know, they had primarily built their business through the partner channel. They used to have those really gigantic ICON conferences with, you know, over 2,000 people, and it was partner driven. Then, under some different leadership and ownership or whatever, they sort of pivoted away from partner and attempted to try to build a more downmarket direct channel for a few years. The partners, you know, felt neglected. So when we showed up at the initial Grow Conference, which was days after we made the acquisition, you know, I had a line of partners wanting to basically not yell at me, but pretty close and say, you know, We've been neglected for years.

Joe Walsh: You know, you guys, the innovation has slowed down and, you know, some of the basic tools and things that we need, we haven't been getting, and these guys haven't really been listening to us. You know, I hadn't fully understood that during the diligence process. I was thinking we could, you know, dump some gas on the fire and really get that partner thing rocking right away. You know, they wanted service first. So we've worked really hard over the course of this year to listen to them, prioritize their needs, and begin delivering them. And we have, in fact, delivered a bunch of them. The feedback I got at our Grow Conference, two weeks ago was, you know, Way to go.

Joe Walsh: The innovation has slowed down, and some of the basic tools and things that we need, we haven't been getting, and these guys haven't really been listening to us. I hadn't fully understood that during the diligence process. I was thinking we could dump some gas on the fire and really get that partner thing rocking right away. They wanted some service first. We have worked really hard over the course of this year to listen to them, prioritize their needs, and begin delivering them. We have, in fact, delivered a bunch of them. The feedback I got at our Grow Conference two weeks ago was, way to go, we really appreciate it. I think that the partner morale and enthusiasm for what we're doing is rising beautifully right now. I think some of these partners work across different tools than just Keap.

Joe Walsh: You know, we really appreciate it. I think that the partner morale and enthusiasm for what we're doing is rising beautifully right now. I think, you know, some of these partners work across different tools than just Keap, and that's not the only thing that they do. They also work with other partners. I think, you know, they're turning our back our way, more excited about what we're doing. You know, I was probably polite when I talked about last year's partner performance. It was weak, you know, compared to what I was counting on. It's probably the primary difference in the results versus what I'd planned.

Joe Walsh: It's not the only thing that they do. They also work with other partners. I think they're turning back our way, more excited about what we're doing. I was probably polite when I talked about last year's partner performance. It was weak compared to what I was counting on. It's probably the primary difference in the results versus what I'd planned. Having just pressed the flesh and spent three days with a whole bunch of them, I have a really good sense for a re-acceleration in 2026 based on what we've done, and based on several deliverables that are coming out over the next number of months. I don't think it's a permanent or terminal problem. I think it's difficult when you do an acquisition to really know all the sentiment and all the momentum around everything that's going on in the business.

Joe Walsh: You know, having just pressed the flesh and spent, you know, 3 days with a whole bunch of them, I have a really good sense for a re-acceleration in 2026 based on what we've done and based on several deliverables that are coming out over the next number of months. I don't think it's a permanent or terminal problem. I think it's difficult when you do an acquisition to really know all the sentiment and all the momentum around everything that's going on in the business. I still would've done the acquisition. Still happy with it, still excited about where we are. There just was a little bit of a 1 step back before we could move forward.

Joe Walsh: I still would have done the acquisition, still happy with it, still excited about where we are. There just was a little bit of a one step back before we could move forward.

Scott Berg: understood. Thank you for taking my questions.

Scott Berg: Understood. Thank you all for taking my questions.

Joe Walsh: Thanks, Scott.

Operator: Your next question comes from the line of Jason Kreyer with Craig-Hallum. Your line is open. Please go ahead.

Jason Kreyer: All right. Can you guys hear me okay?

Joe Walsh: Yes.

Jason Kreyer: Great. Thank you. Joe, look, you just held this user conference. Just curious, any takeaways from customers as far as what the current environment feels like, any changes to purchasing decisions? You had admitted in the last question that you're not blaming the macro or anything, but just give us a tone for how things feel out there.

Jason Kreyer: Okay, great. Thank you. Joe, look, you just held this user conference. Just curious, you know, any takeaways from customers as far as what the current environment feels like, any changes to purchasing decisions? You know, you had admitted in the last question that, like, you're not blaming the macro or anything, but just give us a tone for how things feel out there.

Joe Walsh: You know, I think they're pretty decent. You know, I've said to you before, you know, generally speaking, our customer base fix the nasty things in life. You know, we're not doing high-end retail here or dining or, you know, all the consumer's a little soft or You know, that's really not us. When your, you know, air conditioning doesn't work or it's cold in your house or, you know, you have a broken window, you call our guys, and they take care of it. We're not that economically sensitive. When we don't deliver, it's mostly our fault. There's probably better people for you to tap into the macro. Even if the macro were crappy, we could still crush our numbers with great execution.

Joe Walsh: I think they're pretty decent. I've said to you before, generally speaking, our customer base fixes the nasty things in life. We're not doing high-end retail here or dining, or all the consumers a little soft. That's really not us. When your air conditioning doesn't work, or it's cold in your house, or you have a broken window, you call our guys and they take care of it. We're not that economically sensitive. When we don't deliver, it's mostly our fault. I really can't—there are probably better people if you tap into the macro. Even if the macro were crappy, we could still crush our numbers with great execution. It's really down to us. Having said that, just talking to people, I think the market's fine. I don't really think there's any—I mean, obviously, it's a bifurcated market.

Joe Walsh: It's really down to us. you know, having said that, I, you know, just talking to people, I think the market's fine. I don't really think there's any I mean, obviously, it's a bifurcated market. The highest end of the consumer, you know, owns stocks and is watching them go up and is excited about it, and seems to be, you know, a little softness at the other end. I mean, just it seems to be a general observation, but I don't think that's affecting Thryv's results.

Joe Walsh: The highest end of the consumer owns stocks and is watching them go up and is excited about it, and there seems to be a little softness at the other end. I mean, that seems to be a general observation, but I don't think that's affecting Thryv's results.

Jason Kreyer: Yeah. Appreciate the thoughts nonetheless. Wanted to just follow up on the vertical sales emphasis, you know, the HVAC stuff. As we look out over the next several quarters, how does this manifest in fundamentals? Like, is this? Does this drive NRR? Does this curb churn? You know, or does this grow ARPU? Like, maybe you could walk through what we should expect over the next several quarters.

Jason Kreyer: Appreciate the thoughts nonetheless. Wanted to just follow up on the vertical sales emphasis, the HVAC stuff. As we look out over the next several quarters, how does this manifest in fundamentals? Does this drive NRR? Does this curb churn? Does this grow ARPU? Maybe you could walk through what we should expect over the next several quarters.

Joe Walsh: Yeah, I think it will certainly be gradual. We've got a pretty big company with a pretty big customer base, so it isn't going to instantly be all vertical all the time. Jason, the thing that we're trying to do is move from $4,000 a year per customer to $8,000. As I mentioned, the run rate of our premise sales team is more like $6,000 right now. The overall number is lower in part because of some of the conversions of legacy Marketing Services, and some of those people have come over at much, much lower price points. I mean, just for the avoidance of doubt, our sales force isn't even calling on them. We don't really call on anybody at much under about $350, $400 a month. They're sort of inert, just doing their thing. We're not really working that group very hard.

Joe Walsh: Yeah. I think it will certainly be gradual. You know, we got a pretty big company with a pretty big customer base, so it isn't going to instantly be all vertical all the time. Jason, the thing that we're trying to do is move from $4,000 a year per customer to 8. As I mentioned, the run rate of our premise sales team is more like $6,000 right now. The overall number's lower, in part because of some of the conversions of legacy marketing services. Some of those people have come over at much lower price points. I mean, just for the avoidance of doubt, our sales force isn't even calling on them.

Joe Walsh: We don't really call on anybody at much under about $350, $400 a month. You know, they're sort of inert, just doing their thing. We're not really working that group very hard, so it's hard to get much NRR out of people you aren't even calling on. Anyway, back to what's gonna happen with verticals. I think these early sales in the verticals that we're working have been coming in, you know, more like the 8,000 that we're going for, like, right now. We're ending up making larger sales, and we're selling to a little bit larger businesses, which is ultimately our goal.

Joe Walsh: It's hard to get much NRR out of people you aren't even calling on. Anyway, back to what's going to happen with verticals. I think these early sales in the verticals that we've been working have been coming in more like the $8,000 that we're going for right now. We're ending up making larger sales, and we're selling to a little bit larger businesses, which is ultimately our goal. This might surprise you, but a solopreneur who has less than $500,000 of revenue is churnier than a business with, say, $1 million or $1.2 million or $1.5 million of revenue that has 7, 8, 10, or 12 employees. In our base, we still have a reasonable number of these solopreneurs, and that's where some of the churn noise comes from.

Joe Walsh: This might surprise you know, a solopreneur who has less than $500,000 of revenue is churnier than a business with, say, $1 million or $1.2 million or $1.5 million of revenue that has, you know, 7, 8, 10, 12 employees. You know, in our base, we still have, you know, a reasonable number of these solopreneurs, and that's where some of the churn noise comes from. What the vertical push is allowing us to do, as well as a number of other things that we're doing in our whole go-to-market data strategy, is we're putting our sales resource against a little bit bigger businesses. These are not giant companies. We're talking about 10 employees, 15 employees.

Joe Walsh: What the vertical push is allowing us to do, as well as a number of other things that we're doing in our whole go-to-market data strategy, is we're putting our sales resource against a little bit bigger businesses. These are not giant companies. We're talking about 10 employees, 15 employees. We're calling on those little bit bigger businesses that are a little bit more stable. The vertical program is allowing us to really get traction there because sometimes when you call on a bigger business, they'll say, Oh, I already have a CRM, because obviously we offer a CRM. What they often are not happy with is how they're managing their overall marketing, how they're measuring their marketing, how they're doing with social media.

Joe Walsh: We're calling on those little bit bigger businesses that are a little bit more stable. The vertical program is allowing us to really get traction there, because sometimes when you call on a bigger business, they'll say, Oh, I already have a CRM. You know, we obviously we offer a CRM. What they often are not happy with is how they're managing their overall marketing, how they're measuring their marketing, how they're doing with social media. A lot of them are befuddled with the answer engines, concerned about trying to make sure that they're coming up high in the answer engine results, and don't really have an answer for that. They need some help. There's a number of elements there.

Joe Walsh: A lot of them are befuddled with the answer engines, concerned about trying to make sure that they're coming up high in the answer engine results and don't really have an answer for that. They need some help. There's a number of elements there. Some of them are doing search engine marketing with some guy out of the trunk of his car, and it's okay, but not that great. They want to professionalize it, and they want to be able to measure how it works. We're a great answer in all those areas. Increasingly, what's happening is we're sitting in alongside of other people's CRMs, we're doing the marketing, and they're doing the back office stuff. I think you said, what will we see? I think you will see steady improvement in ARPU.

Joe Walsh: Some of them are doing, you know, search engine marketing with, you know, some guy out of the trunk of his car, and it's okay, but not that great. They want to professionalize it, and they want to be able to measure how it works. We're a great answer in all those areas. Increasingly, what's happening is we're sitting in alongside of other people's CRMs, and we're doing the marketing, and they're doing the back office stuff. I think you said, you know, what will we see? I think you will see steady improvement in ARPU. I think, just, you know, the things that have drove us closer to $4,000, you know, I won't say we're all the way through, but we're through a lot of that.

Joe Walsh: I think just the things that have dragged us closer to $4,000, I won't say we're all the way through, but we're through a lot of that. I think that our sales organization has a lot to sell now. We've built out the product line a lot, and I think we'll be able to make larger sales to customers on which we'll make higher margins, have lower churn. You can see it when you look at that quality metric beginning to really settle in and move. I don't focus as much on the absolute gross customer amount. I'm focused on building that quality metric because there's a little bit of noise in our base from some of those conversions. Anyway, that hopefully gives you some sense for the vertical strategy, Jason.

Joe Walsh: I think that, you know, our sales organization have a lot to sell now. We've built out the product line a lot. I think we'll be able to make larger sales to customers on which we'll make higher margins, have lower churn. You can see it when you look at that quality metric beginning to really settle in and move. I don't focus as much on the absolute gross customer amount. I'm focused on building that quality metric because there's a little bit of noise in our base from some of those conversions. Anyway, that hopefully gives you some sense for, you know, the vertical strategy, Jason Kreyer.

Jason Kreyer: It gives me great sense. Thanks, Joe. Appreciate it.

Jason Kreyer: Gives me great sense. Thanks, Joe. Appreciate it.

Operator: Your next question comes from the line of Arjun Bhatia from William Blair. Your line is open. Please go ahead.

Operator: Your next question comes from a line of Arjun Bhatia from William Blair. Your line is open. Please go ahead.

Linda Lee: Perfect. Thank you. This is Linda Lee on for Arjun Bhatia. Thanks for taking the question. With the onboard of CTO, Sean, for a little over a month now, Joe, what are the early strategies in the works to achieving operational efficiency, product acceleration, and also AI innovation?

Alinda Leon: Perfect. Thank you. This is Alinda Leon for Arjun Bhatia. Thanks for taking the question. With the onboard of CTO Sean for a little over a month now, Joe, what are the early strategies in the works to achieving operational efficiency, product acceleration, and also AI innovation?

Joe Walsh: Yeah. AI. I mean, Sean's AI, all AI all the time, and the guys he's bringing in are all AI all the time, too. You know, not that our team wasn't. We were doing a really good job with AI, but he's taking it to another level. I mean, he's, you know, focused on it and I think really inspecting what we expect, making sure, you know, they have at the ready all the tools that they want, that they're using them, looking at how they're using them. I expect the output of that to be as we span across 2026, the pace of development against our product roadmap, I think will quicken. It's been quickening already.

Joe Walsh: Yeah. AI. I mean, Sean's all AI all the time, and the guys he's bringing in are all AI all the time too. Not that our team wasn't. We were doing a really good job with AI, but he's taken it to another level. I mean, he's focused on it, and I think really inspecting what we expect, making sure they have at the ready all the tools that they want, that they're using them, looking at how they're using them. I expect the output of that to be, as we span across 2026, the pace of development against our product roadmap, I think will quicken. It's been quickening already. We're doing a good job, but I think you're going to see it go faster.

Joe Walsh: We're doing a good job, but I think you're gonna see it go faster. I'm excited about that because there are a bunch of things these larger customers we're working with are looking for, that I think, you know, we'll be able to deliver quicker with this thinking and this approach that he's bringing. The second thing I'd say about Sean is, you know, his recent background with Boomi was all about, you know, integrations and making software work together. As you move upmarket, as we are now doing, you must be able to work and play well with others.

Joe Walsh: I'm excited about that because there are a bunch of things these larger customers we're working with are looking for that I think we'll be able to deliver quicker with this thinking and this approach that he's bringing. The second thing I'd say about Sean is his recent background with Boomi was all about integrations and making software work together. As you move up market, as we are now doing, you must be able to work and play well with others. You've got to be able to have interoperability because a going concern, even one with 12 or 15 employees that has some workflows, doesn't want to change them all in order to embrace your tool, even if your tool is great. You've got to be able to dovetail with what they're doing. As he's often saying to me, Joe, this is a solved problem.

Joe Walsh: You've got to be able to have interoperability because, you know, a going concern, even one with 12 or 15 employees that has some workflows, doesn't wanna change them all in order to embrace your tool, even if your tool is great. You've got to be able to dovetail with what they're doing. As he's often, you know, saying to me, Joe, this is a solved problem. It's something we can handle. Don't worry about it. I just really appreciate that confidence there. You know, and Sean is just an incredible leader, and he will lead our tech organization in a way that I think will create high morale. His sort of NPS scores, if you will, that he gets, his morale scores, when he leads a team are exceptional.

Joe Walsh: It's something we can handle. Don't worry about it. I just really appreciate that confidence there. Sean is just an incredible leader, and he will lead our tech organization in a way that I think will create high morale. His sort of NPS scores, if you will, that he gets, his morale scores when he leads a team are exceptional. I think we'll just have a faster roadmap with a bunch of happy campers in our development teams.

Joe Walsh: I think we'll just have a faster roadmap with a bunch of happy campers in our development teams.

Linda Lee: Awesome. With the new vertical product in home services, are you approaching the product development in a similar way as with Thryv for HVAC, where you work with the industry leader in the market in creating that product? How should we think about this product roadmap in the future in terms of vertical play?

Alinda Leon: Awesome. With the new vertical product in home services, are you approaching the product development in a similar way as with Thryv for HVAC, where you work with the industry leader in the market in creating that product? How should we think about this product roadmap in the future in terms of vertical play?

Joe Walsh: Yeah. I think, you know, as you know, we've got these powerful automations that are kind of, you know, if, when, if, when, if, when, you know, processes. It's a question really of working with a leader in the space and understanding what best practices are, what they do. Once you get inside of home services, whether it's electrical or roofing, they start to get to be pretty similar. There can be some nuances around insurance or, you know, some other details, but there are a lot of similarities, so you're not starting from scratch. That team are working hard. I was talking to the leader of the team last night about the sales organization's ability to actually digest the pace that he thinks his team can run at in cranking these verticals out.

Joe Walsh: Yeah. I think, as you know, we've got these powerful automations that are kind of if, when, if, when, if, when processes. It's a question really of working with a leader in the space and understanding what best practices are, what they do. Once you get inside of home services, whether it's electrical or roofing, they start to get to be pretty similar. There can be some nuances around insurance or some other details, but there are a lot of similarities, so you're not starting from scratch. That team are working hard. I was talking to the leader of the team last night about the sales organization's ability to actually digest the pace that he thinks his team can run at in cranking these verticals out. It's a chicken or egg problem.

Joe Walsh: We, you know, it's a chicken or egg problem. Initially, we needed the verticals and now he's turning them out, and it has a roadmap to turn them out maybe faster than we can train on them and absorb them. We're thinking about how to manage that and how to deal with that. Yeah. They just find a strong business and spend time with them and map it out.

Joe Walsh: Initially, we needed the verticals, and now he's turning them out, and it has a roadmap to turn them out maybe faster than we can train on them and absorb them. We are thinking about how to manage that and how to deal with that. Yeah, they just find a strong business, spend time with them, and map it out.

Linda Lee: Awesome. Thank you.

Alinda Leon: Awesome. Thank you.

Joe Walsh: Thank you very much. Appreciate it.

Operator: Your next question comes from the line of Zach Cummins with B. Riley Securities. Your line is open. Please go ahead.

Zach Cummins: Thanks. Good morning. Appreciate you taking my questions. Joe, I wanted to start off just a little more focused on these answers-based engines. I know it's been a big concern for many publishers and small businesses around visibility of their websites within this evolving dynamic. Can you talk a little bit more about what Thryv's doing to make sure that your customers are remaining visible within these answers-based engines?

Joe Walsh: Oh, I'd love to. That's great. Yeah, we've spent a lot of time understanding how the, how the answer engines operate, what makes them bring back results and so on. I'm not, you know, today gonna go through every detail of that with you. All in all, we think it's a really good thing for us, Zach. It's a tailwind for us. Remember, we have been competing with Google for years. If you go back, you know, 20 years, we had, you know, more traffic than Google did. We were the giant thing with YellowPages.com and DexKnows and Superpages. We had these big sites, and we still have these big sites, and they still have a lot of traffic.

Joe Walsh: Oh, I'd love to. That's great. Yeah. We spent a lot of time understanding how the answer engines operate, what makes them bring back results, and so on. I'm not today going to go through every detail of that with you. All in all, we think it's a really good thing for us, Zach. It's a tailwind for us because remember, we have been competing with Google for years. If you go back 20 years, we had more traffic than Google did. We were the giant thing with yellowpages.com, DexKnows, and SuperPages. We had these big sites, and we still have these big sites, and they still have a lot of traffic. Over time, Google spent a lot of time trying to compete with us and basically take away as many of those references as they could.

Joe Walsh: Over time, Google spent a lot of time trying to compete with us and basically take away as many of those references as they could. All of a sudden, with the answer engines, Google's just hammer lock on all things search is broken. Are they the majority? For sure, still the majority. Now these answer engines often go and they look at YellowPages.com or DexKnows or Superpages or our similar sites in New Zealand or Australia, and they bring those authoritative answers back out of that content and not getting it from Google, and Google can't have any influence on what that search result is.

Joe Walsh: All of a sudden, with the answer engines, Google's just hammer lock on all things search is broken. Are they the majority? For sure, still the majority. Now these answer engines often go and they look at yellowpages.com or DexKnows or SuperPages or similar sites in New Zealand or Australia, and they bring those authoritative answers back out of that content and not getting it from Google. Google can't have any influence on what that search result is. We've got really the pioneer in the internet age sites of these online yellow pages directories with very authoritative, very detailed, very rich content about small businesses in Tupelo, Mississippi, or Rapid City, South Dakota, that never really embraced Google. Those answers are popping right up in these answer engines, which is awesome for us.

Joe Walsh: You know, we've got the really the pioneer in the internet age sites of these online Yellow Pages directories with very authoritative, very detailed, very rich content about small businesses in Tupelo, Mississippi, or Rapid City, South Dakota, that, you know, never really embraced Google. Those answers are popping right up in these answer engines, which is awesome for us. It's allowing us to, you know, deliver more value than we might have without this. That's good. Secondly, you know, when Remember, we build and host websites for people, some 54,000 or something like that at the moment, and more coming in every day. We're really good at this. We understand how to create, sort of a knowledge graph in a way that the answer engine is looking for it.

Joe Walsh: It's allowing us to deliver more value than we might have without this. That's good. Secondly, remember, we build and host websites for people, some 54,000 or something like that at the moment, and more coming in every day. We're really good at this. We understand how to create sort of a knowledge graph in a way that the answer engine is looking for it. We understand how to do AEO, answer engine optimization, how to make sure that everything about the way we present a small business's information, both on their site and even off-site if we're working with them in social or some of the other listings management areas that we care for customers and some of our add-ons. We can optimize them and help them do better.

Joe Walsh: We understand how to do AEO, answer engine optimization, how to make sure that everything about the way we present a small business's information, both on their site and even off-site, if we're working with them in social or some of the other listings management areas that we care for customers in some of our add-ons, and we can optimize them and help them do better. That story I mentioned briefly about the partner who had the dentist, you know, in addition to just, you know, going with Thryv, he had also authorized doing some of these extra things. That 27 leads overnight was like a shock for that guy. He was really excited about it because he basically turned the spigot on and let us do our thing. The answer engines are a part of our thing now.

Joe Walsh: That story I mentioned briefly about the partner who had the dentist, in addition to just going with Thryv, he had also authorized doing some of these extra things. That 27 leads overnight was like a shock for that guy. He was really excited about it because he basically turned the spigot on and let us do our thing. The answer engines are a part of our thing now. I would say if you offered me a world where I had the answer engines or not, I would take them all day and twice on Sunday. I mean, it's really been great for us. I don't mind Google loosening their grip just a little bit on everything.

Joe Walsh: You know, I would say if you offered me a world where, you know, I had the answer engines or not, I mean, I would take them all day and twice on Sunday. I mean, it's really been great for us. I don't mind Google loosening their grip just a little bit on everything.

Zach Cummins: Understood. My one follow-up question is just around balancing ARPU expansion with looking for ways to continue to grow the customer base. Obviously, ARPU expansion has been the bigger driver here in recent quarters, it looks like that's gonna continue to be the case as you get more quality customers within that SaaS customer base. Can you just give us a sense of maybe when we hit that inflection point and we start to see stabilization in that gross customer count and maybe you're getting a little more of a balanced contribution from both customer growth and ARPU expansion?

Zach Cummins: Understood. My one follow-up question is just around balancing ARPU expansion with looking for ways to continue to grow the customer base. Obviously, ARPU expansion has been the bigger driver here in recent quarters, and it looks like that's going to continue to be the case as you get more quality customers within that SaaS customer base. Can you just give us a sense of maybe when we hit that inflection point and we start to see stabilization in that gross customer count, and maybe you're getting a little more of a balanced contribution from both customer growth and ARPU expansion?

Joe Walsh: Yeah. Look, we have a, you know, a bunch of very specific initiatives underway to build our business outside of the zoo. If we were just to rush out there naked and try to do it, we would be just like any other software company, and we'd be dealing with, you know, cost of acquisition that, you know, didn't play well with the lifetime value, you know. We've had a real almost unfair advantage by having this gigantic customer base of people that like us, who take our phone call and talk to us, and we're leveraging. Let me answer your question this way. Let's just say we didn't add any customers, we just replaced churned customers and just hung out where we are.

Joe Walsh: Yeah. Look, we have a bunch of very specific initiatives underway to build our business outside of the zoo. If we were just to rush out there naked and try to do it, we would be just like any other software company, and we'd be dealing with cost of acquisition that didn't play well with the lifetime value. We've had a real, almost unfair advantage by having this gigantic customer base of people that like us, who take our phone call and talk to us, and we're leveraging. Let me answer your question this way. If we started, let's just say we didn't add any customers, we just replaced churned customers and just hung out where we are.

Joe Walsh: We could still take this business from the, whatever it is, a little less than $500 million revenue we're running at right now to $800 or $900 million revenue just by doing what we've talked about, growing the ARPU in the base. You're going to see us grow very strongly and do a very good job even before we add anything. In terms of adding, we're obviously managing the economics of the adding, making sure that the model of our cost of acquisition to lifetime value is right. When you make larger sales to a little bit larger businesses, that's all a lot easier. We're working on processes internally to do that. I would say at the moment, we're not pushing really hard for really any sub-growth in the next short period of time, the next few quarters.

Joe Walsh: We could still take this business from, you know, the whatever it is, you know, a little less than $500 million revenue we're running at right now to $800 or $900 million revenue just by doing what we've talked about, you know, growing the ARPU and the base. You're gonna see us grow very strongly and do a very good job, even before we add anything. In terms of adding, you know, we're obviously managing the economics of the adding, making sure that the, you know, the model of our cost of acquisition to lifetime value is right. When you make larger sales to a little bit larger businesses, that's all a lot easier. We're working on processes internally to do that.

Joe Walsh: I would say, you know, at the moment, we're not pushing hard for any sub-growth in the next short period of time, the next few quarters. We're getting strong growth by making sure all those customers that we've brought over are getting, you know, visits, a lot of cases in-person visits or, you know, in some cases could be online visits, you know, Zoom visits. We're spending time with them, making sure they understand what they have and talk to them about their options to do more. That's super productive for us right now. Our sales force is really happy because they're writing a lot of business doing that. We don't have an emphasis on pushing that number up.

Joe Walsh: We're getting strong growth by making sure all those customers that we've brought over are getting visits, a lot of cases, in-person visits, or in some cases, could be online visits, Zoom visits. We're spending time with them, making sure they understand what they have, and talking to them about their options to do more. That's super productive for us right now. Our sales force is really happy because they're writing a lot of business doing that. We don't have an emphasis on pushing that number up. I wouldn't be in your modeling saying we're going to put huge gains in the short run on that base. I think over the long haul, we will. In the shorter run right now, we're pretty focused on bedding down, engaging, and growing the ones that we've brought over.

Joe Walsh: I wouldn't be in your modeling, you know, saying we're going to put huge gains in the short run on that base. I think over the long haul we will, but in the shorter run right now, we're pretty focused on bedding down and engaging and growing the ones that we've brought over.

Zach Cummins: Understood. Well, thanks for taking my questions.

Joe Walsh: Thank you.

Operator: Your next question comes from Matthew Swanson with RBC. Your line is open. Please go ahead.

Operator: Your next question comes from Matt Swanson with RBC. Your line is open. Please go ahead.

Matthew Swanson: Oh, great. Sorry. Great. Thank you guys for taking my questions. I really appreciate the quality SaaS client metrics, new disclosure, as you mentioned, reducing a lot of that noise. Can you just talk a little bit more, maybe as a follow-up to that last answer, of the trends you're seeing within that cohort, especially now that we've gotten to 77% of the client base, just kind of trends that you're seeing in that group relative to, you know, the overall business? The assumption would be that that group is gonna start to be, you know, much more broadly reflected in the business results overall.

Matt Swanson: Great. Thank you guys for taking my questions. I really appreciate the quality SaaS client metrics, new disclosure, as you mentioned, reducing a lot of that noise. Can you just talk a little bit more, maybe as a follow-up to that last answer, of the trends you're seeing within that cohort, especially now that we've gotten to 77% of the client base? The assumption would be that that group is going to start to be much more broadly reflected in the business results overall. Just kind of trends that you're seeing in that group relative to the overall business.

Joe Walsh: I'd love to, Matt, I really appreciate the question because it's really at the heart of this. You know, I think sometimes people look at our business, and they have a hard time really perceiving it because it's in transformation, and you see the top-line revenue bouncing around based on the pub schedule, you know, within the print business as it runs off. And then there are customer groups, in some cases, that came over in clumps, some of which are pretty far below the spend levels that we're spending time with our field sales force. It creates noise in the numbers, and you're like, Okay, what's the pattern here? I think if you look at these customers spending $400 or more, you know, they tend not to be solopreneurs.

Joe Walsh: I'd love to. I really, Matt, I appreciate the question because it's really at the heart of this. I think sometimes people look at our business and they have a hard time really perceiving it because it's in transformation, and you see the top-line revenue bouncing around based on the pub schedule within the print business as it runs off. There are customer bases or customer groups, in some cases, that came over in clumps, some of which are pretty far below the spend levels that we're spending time with our field sales force. It creates noise in the numbers, and you're like, okay, what's the pattern here? I think if you look at these customers spending $400 or more, they tend not to be solopreneurs. They tend to be businesses with multiple employees and a little bit of billings.

Joe Walsh: They tend to be, you know, businesses with, you know, multiple employees and, you know, a little bit of billings. They're actually kind of real companies. They, you know, they tend to churn less. And their willingness, their interest, their ability to buy more tools from us, buy more software from us, and utilize it is greater. We, we find we're able to talk to somebody in the business who's managing, you know, the marketing or managing the software, and we're able to, you know, work with them and talk with them about that. That's very rewarding for us. A lot of times these businesses are also succeeding. They themselves are growing. They, you know, year over year over year, they have more revenue, they have more resources, and they have a greater ability to buy more.

Joe Walsh: They're actually kind of real companies. They tend to churn less. Their willingness, their interest, their ability to buy more tools from us, buy more software from us, and utilize it is greater. We find we're able to talk to somebody in the business who's managing the marketing or managing the software, and we're able to work with them and talk with them about that. That's very rewarding for us. A lot of times, these businesses are also succeeding. They themselves are growing. Year over year over year, they have more revenue. They have more resources, and they have a greater ability to buy more. It's a virtuous circle where our offerings are helping them get leads, grow, and build their order book. With that growth, they then can buy more stuff.

Joe Walsh: It's a virtuous circle where our offerings are helping them get leads and grow and build their order book. With that growth, they then can buy more stuff. They start getting more and more employees, then they can put them on Workforce Center and all these other kind of virtuous circle things. That's pretty much what we talk about every day in the company and what we're working on, is these customers that we're actually able to spend time with and work.

Joe Walsh: They start getting more and more employees, then they can put them on Workforce Center and all these other kind of virtuous circle things. That's pretty much what we talk about every day in the company and what we're working on is these customers that we're actually able to spend time with and work. We have kind of a little bit of a sort of an unwritten rule, but we're trying to service those very tiny customers through online channels, chat, and so on, and really not spend as much time with them because obviously, our time is super expensive. We're spending time with the larger businesses where we think there's upside to grow. I think you will see over the coming quarters that quality metric is what we've accomplished, and you're going to see that thing steadily building. They're buying multi-product.

Joe Walsh: We have kind of a little bit of a sort of a unwritten rule, but, you know, we're trying to service those very tiny customers through, you know, online channels and chat and so on, and really not spend as much time with them because it's obviously our time is super expensive, so we're spending time with the larger businesses where we think there's upside to grow. I think you will see over the coming quarters that quality metric is what we've accomplished. You're gonna see that thing steadily building. You know, they're buying multi-product. Their spend levels are good. Their churn levels are fairly low. And I think you'll see us building on that. And that's really the core of what we've established here through this process.

Joe Walsh: Their spend levels are good, their churn levels are fairly low, and I think you'll see us building on that. That's really the core of what we've established here through this process.

Matthew Swanson: That's really helpful. Then I just wanted to kind of combine two comments that we made earlier in the call. At one point, we were talking about there's some regions that, you know, in the SMB space never like fully adopted things like Google, and now we're rolling out, you know, AI and optimized search. I was curious about First you develop the products, but then also how do you go to market with some of this, you know, brand new cutting-edge technology to businesses that might be a couple generations behind technology-wise and really, like, letting them know or, like, perceive kind of what the value to them is gonna be from this?

Matt Swanson: That's really helpful. I just wanted to kind of combine two comments that we made earlier in the call. At one point, we were talking about there's some regions that in the SMB space never fully adopted things like Google. Now we're rolling out AI and optimized search. I was curious about, first, you develop the products, but then also, how do you go to market with some of this brand new cutting-edge technology to businesses that might be a couple of generations behind technology-wise, and really letting them know or perceive kind of what the value to them is going to be from this?

Joe Walsh: We were just talking about this yesterday. You don't go around, you know, walk in there talking about, you know, automations and AI and, you know, blowing their mind. You make it pretty simple. You know, you talk to them about their ads and listings in the directories, making sure they're right, making sure their listings are correct all across the web, making sure they have a good hygiene, basic website and a good foundation. You keep it all pretty basic and straightforward. You know, like that ad in the old days for the tomato sauce Ragú, you know, it's in there. They used to say it's in there. If they have questions about any of these latest things, you can explain it's in there.

Joe Walsh: We were just talking about this yesterday. You don't go around, walk in there talking about automations and AI and blowing their mind. You make it pretty simple. You talk to them about their ads and listings in the directories, making sure they're right, making sure their listings are correct all across the web, making sure they have a good hygiene, basic website, and a good foundation. You keep it all pretty basic and straightforward. Like that ad in the old days for the tomato sauce Ragu, it's in there. They used to say it's in there. If they have questions about any of these latest things, you can explain it's in there. I mean, AI is right in there, and it's available. We don't lead with that.

Joe Walsh: I mean, AI is right in there, and it's available, but we don't lead with that. You can intimidate a customer really quickly with a bunch of acronyms and throwing around all kinds of fancy terms. We try to build it up off of a foundation, and Marketing Center is an amazing foundation. You know, for a century people have been saying, you know, I know a lot of my advertising is wasted. I don't know what it is. Within Marketing Center, you can tell exactly what works. We are able to put call tracking numbers on offline things, online things, everything you do. You can take a look at heat maps for your website, bounce rates for your website. You can put widgets on your website, chat tools.

Joe Walsh: You can intimidate a customer really quickly with a bunch of acronyms and throwing around all kinds of fancy terms. We try to build it up off of a foundation. Marketing Center is an amazing foundation. For a century, people have been saying, I know a lot of my advertising is wasted. I don't know what it is. Within Marketing Center, you can tell exactly what works. We are able to put call tracking numbers on offline things, online things, everything you do. You can take a look at heat maps for your website, bounce rates for your website. You can put widgets on your website, chat tools. Every which way somebody can come at you, we can measure it, facilitate it, and improve it through Marketing Center.

Joe Walsh: Every which way somebody can come at you, we can measure it and facilitate it and improve it through Marketing Center. You know, for a lot of people, the money they spend on outreach to try to make the phone ring and bring in more leads is near and dear to them. The promise of having a way to optimize it and measure it and then tie it back to their order book, even for somebody, you know, in Rapid City, South Dakota, that's something that's an exciting prospect. We just try to keep it, you know, keep the jargon out of it. Remember, we've got a guy that's been in Rapid City, South Dakota for 140 years. Maybe not that exact guy, but as a company we have.

Joe Walsh: For a lot of people, the money they spend on outreach to try to make the phone ring and bring in more leads is near and dear to them. The promise of having a way to optimize it and measure it and then tie it back to their order book, even for somebody in Rapid City, South Dakota, that's something that's an exciting prospect. We just try to keep it, keep the jargon out of it, and remember, we've got a guy that's been in Rapid City, South Dakota for 140 years. Maybe not that exact guy, but as a company, we have. We started in 1886, so we have that relationship. We're there. We're already working with them. In those flyover places, we do really, really well.

Joe Walsh: You know, we started in 1886, so we have that relationship. We're there. We're already working with them. In those flyover places, we do really, really well in those flyover places.

Operator: There are no further questions at this time. This concludes today's call. Thank you for attending. You may now disconnect.

Question and answer session, if you'd like to ask a question. Please raise your hand, if you've dialed in to today's call. Please press star nine to raise your hand and star sixth on mute your line when prompted.

I'll now hand, the conference over to Cameron Lazard, Vice President of corporate development and strategy. Please go ahead.

Good morning, and thank you for joining us for thrive Holdings third quarter 2025 earnings Conference call with me today are Joe Walsh, Chairman and Chief Executive Officer, and Paul Rouse Chief Financial Officer.

During this call we will make forward looking statements that are subject to various risks and uncertainties actual results may differ materially from these statements a discussion of these risks and uncertainties is included in our earnings release and SEC filings. Today's presentation will also include non-GAAP financial measures.

Which should be considered in addition to but not as a substitute for our GAAP results. Reconciliations of these measures can be found in our earnings release as a reminder, on this call SaaS revenue reflects the combined performance of thrive and keep.

We will only specify keeps performance when discussing its revenue contribution for the quarter and fiscal year with that I'll turn the call over to Joe Walsh, Chairman and CEO Joe.

Thank you Cameron and good morning, everyone I'd like to give you an update on our business transformation. Some of the progress that we're making and then Paul will take you through this quarter's numbers after that.

Firstly I wanted to do is update you on our grow conference two weeks ago, we had out in Arizona, a small business growth conference. It was broken into two pieces. The first couple of days, we're a partner conference a lot of the partners that both Keith and drive have which is really now one partner community and I have to tell you when.

When we first met them a year ago, they were a little bit angry they were saying we've not been invested in enough by the prior ownership of Keith.

And we feel like you owe us certain deliverables and so.

I must say our partner results. This year have been okay, but they have not been the kind of big lift that we were looking for and so we worked really hard with these partners to figure out what kind of updates they need what kind of partner portal they need what kind of rest API updates, what kind of product improvements and which things really matter.

And we've delivered a lot for that and so.

This partner update was like Christmas us delivering on the value that they were looking for and so better expectations. As we go into 'twenty six I think these partners are pretty impressed with the pace at which we are delivering an innovative software. So that was great and the second part of the conference was small businesses hundreds of small.

Businesses came in obviously some existing customers came to learn more about how to use the tools, but I was surprised at how many prospective customers can customers that are in some cases or on some other tool or are known any tool who came to learn more about how to market their business and we presented to them.

A really simple growth model of market sell and grow and showed them, how particularly marketing center can give them the foundation for growth marketing centers, our fastest selling product, it's really become the tip of the spear for us as we've settled in on this kind of market cell growth.

<unk> and it really gives you all the good hygiene. It gets your listings managed all across the web. It gives you a well built website, that's not only search engine optimized but its answer engine optimized which is really important because the answer engines are gaining share every day. So we built the knowledge graph.

Half on these sites and we're continually tweaking the sites to make sure that Theyre really answer engine friendly and bringing you up high on those results and so that's been.

A really big as well when you have a marketing center you have call tracking numbers. So you can track results everywhere online offline. So you can figure out the truck wrap that you have does that pull calls the yard sign you have in front of the job that youre doing when youre doing stuff in social how is that pulling and you can even look at one Soc.

It will.

Sort of.

Personality versus another and what's pulling the best if youre running search campaigns you can track everything.

And what we're finding is a lot of people are using marketing center, even if they are using someone else's CRM they might they might be on one of our competitor CRM and then using marketing center in order to manage their marketing because the best thing available in the market. So we're pretty excited about the progress we're making there the grow conference was really a.

<unk> that.

These small businesses want to get their marketing right.

They really want to find a way to be found and consistently measure what's working so we're excited about that we were also able to update the attendees on the AI developments that we've experienced we are rolling out lots of AI within the software.

We've got social captioning Ware.

When you do social posts.

It can help you right that social posts and your personality, if Europe posting a photo it can help you capture that suggest several captions you can pick the one do you think works. The best review response, its a big deal because lots of these small businesses have a tough time keeping up with reviews. So the software goes and finds review brings.

Two you make sure you don't Miss it and suggest several.

<unk> responses and you can just pick the one in the middle are the ones that you think is the best voice for you and it posted its all taken care off and you don't have to kind of make a sticky notes remember to do it. It's all happening in real time, you are listing it is helping you with everything with service descriptions.

If you've got a new area of your business or something you can use the AI to help you write a very professional service description of what you do.

So that.

Not all of our customers are the best wordsmith or so it kind of gives.

It gives them a more polished space.

Everything to do with web sites, we've got obviously a service that we provide as a company to build big powerful websites for customers, but sometimes they don't need all of that and so we've got a simple AI website builder now it'll be out in a couple of weeks.

That will allow a small business to come in and just spin up a quick website.

Using AI copywriting.

Copywriting assistant when Youre sitting there and youre doing any kind of copywriting for landing pages are trying to build a little email campaign, we've got that built right into the tool.

That's happening.

You have got call analysis. This is something we've had in beta for a little while it's working really well where it takes your calls and actually gives you a transcript of the inbound call and then doesn't lead scoring on it I was talking to one of our partners at the conference who is in on the beta and he was telling me about.

Dentist that he has out in the Pacific Northwest, who over a two day period of time. We've got 27 leads he got a full transcript to the entire call and they were all lead scored in the lead with the dentists was just dumbfounded as I can't believe this.

This 27 leads.

And they're scored all the details and the partners that are just the beginning this is the future. This is what these guys are delivering so.

Really excited about.

The lead scoring and call analysis.

No.

AI is being used throughout the product.

To make it easier for small business people kind of meet them, where they are and obviously AI is doing a lot internally for us as a company and all the fulfillment that we're doing where we're building sites doing social we're using AI to amplify our productivity. Our legal department uses that were using it in an accounting or using it all over the company. So.

You've probably heard from other businesses that they're finding.

Meaningful efficiency, there and then maybe most importantly in our software development team. They are using all the latest tools to amplify and speed up the roadmap of development and then obviously using AI for QA trying to make sure that the.

The quality is there and speed up the process of finding its already bugs get to the bottom line and get it sorted and get them squared away. So AI has been a big lift for us it's been a big part of our progress that we've made this year and really feel as though.

The availability of AI in the software is a big tailwind for US as we go into next year really excited about that so I've got a couple of other comments to make later, but I know you are anxious to hear the number so let's turn it over to Paul and let Paul take you through the numbers Paul.

Thanks, Joe.

Dive into the numbers SaaS reported revenue was $115 9 million in the third quarter, representing an increase of 33% year over year.

<unk> contributed $16 8 million in the third quarter, excluding Keith thrive SaaS business grew 14% year over year SaaS adjusted gross margin increase.

Increased 80 basis points year.

Year over year, reaching 73% in the third quarter.

<unk> adjusted EBITDA increased to $19 6 million exceeding guidance and resulting in an adjusted EBITDA margin of 17%. We ended the third quarter with 103000, SaaS subscribers, including 13000 from Keith.

Representing a 7% increase year over year.

A large established customer base now in place our focus is on increasing spend per customer by driving adoption of more products and solutions, especially among our high value clients embark trip businesses. This approach meaningfully expand SaaS or <unk>.

<unk> value and is a more efficient driver of profitability in the third quarter overall, SaaS Arco reached $365.

Thrive at $355 up sequentially and keep our remaining strong at $437.

Seasoned and our car declined to 94% this quarter.

Primarily reflecting noise introduced as we transition legacy digital marketing services clients.

Onto a modern SaaS platform.

As we systematically wind down older Tech platforms on our marketing services side, we are upgrading clients to our current software offerings, while honoring their previously committed pricing vastly improving the value they receive.

But introducing a wave of smaller accounts into our base, which temporarily impact arent, Peru at that time.

These accounts from our Q3, 2023 migration announced cycling into a seasoned and our calculation.

After crossing the 12 months threshold.

Performance, we're seeing from this group is consistent with the minimal initial commitments and lower propensity to expand spend compared to our higher quality software clients.

This is all part of a broader business transformation and while some SaaS metrics will show temporary noise. During this transition we are making steady progress building a solid software client base with strong underlying fundamentals.

Multi product adoption continues to accelerate in the third quarter clients with two or more SaaS products grew to 17000 or 20% of our base compared to 15000 or 16% a year ago.

Thrive centers per client.

Was 50% at the end of the third quarter compared to 12% in the prior year.

Moving over to marketing services third quarter revenue was $85 7 million and above guidance.

Third quarter marketing services adjusted EBITDA was 21 2 million.

Resulting in adjusted EBITDA margin of 25%.

As anticipated this quarterly performance is subject to the dynamics of the print schedule, which performed better than expected and returned to normalized levels starting in the second quarter.

Third quarter marketing services billings totaled $76 million down 33% year over year, reflecting the intentional shift in our strategy.

As we continue to initiate upgrades of the legacy digital marketing services products for clients to our SaaS platform declined book purses.

Yes.

At a managed pace, we remain on track to exit marketing services by 2028.

Cash flows lasting through 2003rd ensuring strong liquidity as we fully transformed to a pure play software business <unk>.

Company Billings were $184 2 million.

Down just 4% year over year underscoring the company's steady progress.

As it transforms into a leading SaaS business at positions itself to stabilize total revenue and return to sustainable growth.

In the third quarter, we generated free cash flow of $14 six megawatts, which brings the year to date free cash flow to $18 8 million.

We ended the third quarter with net debt down $9 million $265 million, bringing our leverage ratio to one nine times.

Turning to our outlook for 2025 for the fourth quarter, we expect SaaS revenue in the range of $118 million to $121 million.

For the full year, we are updating our SaaS revenue to a range of 460 million.

Two $463 million.

For the fourth quarter, we expect SaaS adjusted EBITA in the range of $19 2 million, a 21 2 million.

The full year, we are raising SaaS adjusted EBITDA guidance to a range of $73 million to 75.

For the full year, we expect marketing services revenue in the range of 323 million to $325 million.

For the full year, we are updating marketing services adjusted EBITDA guidance to a range of $76 million to $78 million.

Now back to Joe Thanks.

Thanks, Paul.

To talk a little bit about our vertical initiatives.

We talked earlier this year about our HVAC vertical we had taken the key automation tools and thrive marketing center and kind of pack them together and created.

These really interesting vertical applications. The first one that we applied was to HVAC.

He was recently talking to.

That's kind of the pilot our pioneer customer on that.

And <unk>.

They have been really pleased <unk> gotten a very strong response from.

From what we put in place that I just wanted to give you some sense of of the statistics that they've given us they've.

Had around a 10% lift in jobs booked.

25% increase in total revenue, they're generating 50, plus qualified leads every month and they are seeing an increase in repeat business about 12% increase in repeat business. Because the automation is have automated reminders that are reaching out and tickling their customers and saying hey, what.

About this what about that and it is stimulating business out of their base. They also had felt as though they werent as good at social media is they'd like to be that you can put almost any small business in that category and they've seen a 45% boost in.

Engagement in their social tools, and what they're doing with social so.

They are really happy campers, we've had very strong sales within our HVAC vertical and we're now about to rollout.

<unk> home services vertical to get that more of the home improvement type broader categories and we've got a bunch of queued up behind that so the model that we use where we use the automation customize them around the vertical.

I think a terrific model I want to say one other thing just for those of you that are thinking about how we fit in the market and our competition in all of that this customer I've. Just described in detail how happy they are with marketing center. They are a service tightened customer.

This is a very big HVAC company with tons and tons of trucks on the road.

And they are a service tightened customer service site and tracks, the freon and the wing nuts, and where the trucks are and we handle the marketing.

And that paradigm I think is increasingly building where people are using some really deep vertical CRM and then using our.

Our tool for the marketing and we do have a CRM. Our CRM is more of a horizontal we haven't done as much down deep down in the verticals. So when you get to a larger more sophisticated business. They often are using one of these in industry.

<unk>, that's fine with US we are agnostic about that our marketing center fits perfectly in with that and we've got a lot of integrations and we're adding more all the time so.

I wanted just to say that one of the pieces of this transformation journey, that's happening as our software platform is building out now and becoming more complete were beginning to move up market.

You might say well, Joe your RF, who has been bouncing around it has bounced around because we've been converting legacy.

<unk> services people off of platforms in some cases, they came in at pretty low billing numbers, because we were looking to just shut down a platform and we allow them to come over and we kind of grandfathered in there.

Preferable rates that they've had in the past, but in terms of what we're selling we're moving from that 4000 to 8000 at a very rapid clip.

Our U S field sales force is selling up in the $6000 range with the run rate sales that theyre, making every day and as we build products as we're focusing our marketing initiatives. It's all moving upmarket and so up market has been a big deal in one of the things we've been looking at lately to try to help investors understand.

We've been looking at the $400 and up.

<unk> segment, which is growing steadily and strongly and has grown very predictably and these customers had very good retention metrics, we make good margins on those customers.

And it helps.

Readout of noise, that's there with some of the smaller customers that have come in through these conversions. So.

We will talk about that more in the future, but our transformation as a business is continuing at a nice pace and as my last comment here I wanted to mentioned, Sean Waechter are new.

<unk> Technology officer.

I think he is middle name could potentially be AI. He is all AI all the time.

And we're really excited about what we think we can do with John in the year ahead to really up level even further.

Our integration of AI and our pace.

Throughput.

Through our engineering team so.

Really excited to welcome Sean to the company.

I'll stop there and turn it over to questions operator.

Thank you we will now begin the question and answer session. Please limit yourself to one question and one follow up if you would like to ask a question. Please raise your hands now please standby, while we compile the Q&A roster.

Okay.

Your first question comes from the line of Scott Berg with Needham <unk> Company. Your line is open please on mute yourself Sir.

Hi, everyone. Thanks for taking my questions here.

Joe I wanted to start off on the SaaS business.

Obviously growth remains.

Reasonably strong, but you did miss your guidance in the quarter on a very minimal amount, but it did come in at the very low end of the range help us understand kind of what's happening whether it's on the new sales side or the expansion side to kind of.

Drive the results versus your expectations 90 days ago.

Yes, I mean look we as you say, we are making really good progress transforming.

What used to be a phone book business into SaaS.

Software business and Theres a lot of execution involved in.

Our execution wasn't flawless in this quarter.

You guys often ask me about the macro and.

Whether it's the economy I can't blame anything outside at all.

Our execution just just.

Yes.

A smidge shy of where we wanted to be.

And I think we are doing the things that we need to to make sure. We continue to execute even better going forward. So I don't think theres any big message here the trend here.

We.

We just didn't deliver.

But I don't have any any complaints about the market or anything like that.

And then in your pre scripted remarks, Joe you had talked about.

Paraphrase partner results have been just kind of a okay to date, maybe relative to your expectations.

Where how do you I guess, how do you improve some of the partner opportunity with the with the.

Keep ecosystem that you all obviously brought over or is this purely just a function of the additional innovation that you spoke about with some more time with these partners or as you've had a chance to kind of work with them in the last nine months or so have you been able to find anything different.

Differently, maybe that you have to implement in your strategies, there to maybe leverage that ecosystem even more.

Yes, Scott.

The old infusions off keep really well and they had primarily built their business through the partner channel is to have those really gigantic icon conferences with over 2000 people and it was it was partner driven and then.

Under some different leadership and ownership or whatever they sort of pivoted away from partner and attempted to try to build a more down market direct channel for a few years and they really the partners.

Felt neglected and so when we showed up at the initial.

Grow conference, which was days after we made the acquisition.

I had a line of partners wanting to basically.

Not yell at me, but pretty close and say we've been neglected for years you guys.

The innovation has slowed down.

Some of the some of the basic tools and things that we need we had been getting these guys haven't really been listening to us and.

I hadn't fully understood that during the diligence process I was thinking we could dump some gas on the fire and really get that partner thing rocket right away.

<unk>.

They wanted.

They wanted to service first and.

So we've worked really hard over the course of this year to listen to them prioritize their needs.

And begin delivering them and we have in fact delivered a bunch of them and the feedback I got at our growth conference. Two weeks ago was way to go we really appreciate it.

And I think that the.

Partner morale and enthusiasm for what we're doing is rising beautifully right now.

And I think some of these partners work across different tools and just keep that thats not the only thing that day. They do they also work with other partners.

And I think they're they are.

Turning our back on our way more excited about what we're doing so.

I was probably polite when I've talked about last year's partner performance. It was it was weak compared to what I was counting on.

It's probably the <unk>.

Primary difference in the results versus what I'd plan, but.

Having just press the flesh and spent.

Three days with a whole bunch of them I have a really good sense for.

A reacceleration in 2026 based on what we've done and based on several deliverables that are coming out over the next number of months. So I don't think its a permanent a terminal problem I think it's difficult when you do an acquisition to really know all the sentiment and all the momentum around everything that's going on in the business.

And.

I still would have done the acquisition still happy with it still excited about where we are.

There just was a little bit of a one step back before we could move forward.

Understood. Thank you for all for taking my questions. Thanks, Scott.

Your next question comes from the line of Jason <unk> with Craig Hallum. Your line is open. Please go ahead.

Alright can you guys hear me okay, yes.

Yes, okay, great. Thank you. So Joe you just held this user conference just curious.

Any takeaways from customers as far as what the current environment feels like any changes to purchasing decisions you admitted and the last question that youre not blaming the macro or anything, but just give us a tone for how things feel out there.

I think.

They are pretty decent.

I've said to you before.

Generally speaking our customer base fixed the nasty things in life. So we're not doing high end retail here defining or.

All of the consumers a little softer.

Really not us when you are.

Air conditioning doesn't work or it's cold in your house or.

Have a broken window, you call, our guys and they take care of it so.

We're not that economically sensitive when we don't deliver it's mostly our fault I really can't.

Probably better people or for you to tap into the the macro we really even if even if the macro were crappy, we could still crusher, our numbers with great execution, it's really down to us so having said that.

Just just talking to people I think the market is fine.

I don't really think theres any I mean, obviously, it's a bifurcated market the highest highest end of the consumer.

Owned stocks and is watching them go up that is excited about it and it.

It seems to be a little softness at the other end I mean, just it seems to be a general observation, but I don't think thats affecting drives results.

Okay.

I appreciate I appreciate the stops nonetheless.

Wanted to just follow up on the vertical sales emphasis the HVAC stuff as we look out over the next several quarters.

Manifest and fundamentals like is it that's driving IRR does this curb churn.

This is al <unk>.

You can walk through what we should expect over the next several quarters.

Yes, I think it will it will certainly be gradual.

We've got a pretty big company with a pretty big customer base. So we can't just it isn't going to instantly.

All vertical all the time, but.

Jason the thing that we're trying to do is.

Moved from $4000 a year per customer to eight.

And as I mentioned the run rate of our premise sales team is more like six Grand right now and the overall numbers lower in part because of some of the conversions of legacy marketing services and some of the people who've come over at much much lower price points and I mean, just for the avoidance of doubt our salesforce isn't even calling on them.

We don't we don't really.

We don't really call on anybody at much under about $3 $5400 a month.

They are sort of in there.

Doing their thing we're not we're not really working that group very hard so its hard to get much NR on people arent, even calling on.

So anyway back to.

Whats going to happen with verticals I think these these.

Early sales in the verticals that we are working have been coming in.

More like the 8000 that were going for like right now so we're ending up making larger sales and we're selling to a little bit larger businesses, which is ultimately our goal this might surprise you but.

Our solo printer, who has less than $500000 of revenue is charity or than a business with say a million or a $1 million to a $1 five of revenue that has.

Seven 810 12 employees.

In our base, we still have a reasonable number of these solo printers, and Thats, where some of the churn noise comes from so what the vertical pushes allowing us to do and as well as a number of other things that we're doing in our whole go to market data strategy is we are putting our sales resource.

Against a little bit bigger businesses. These are not giant companies were talking about 10 employees <unk> employees, but we're calling on those a little bit bigger employees that or excuse me a little bit bigger businesses that are a little bit more stable.

The.

Vertical program is allowing us to really get traction there because sometimes when you call. It a bigger business they'll say Oh I already have a CRM.

We obviously, we offer a CRM.

But.

What were they often are not happy with is how theyre managing their overall marketing, how they're measuring their marketing, how they're doing with social media.

A lot of them are befuddled with the answer engines concerned about.

Trying to make sure that theyre coming up high in the in the answer engine results.

And don't really have an answer for that and they need some help.

There's a number of elements there some of them are doing.

Search engine marketing with <unk>.

Some guy out of the trunk of his car and it's okay, but not that great. They won't professionalize it and they want to be able to measure how it works. So we are a great answer and all of those areas and so increasingly what's happening is.

We're sitting in alongside of other People's CRM.

We're doing the marketing and Theyre doing the back office stuff and.

So I think you said you know what what we see I think you will see steady improvement in <unk>.

I think.

The things that a drug us closer to $4000.

I won't say, we're all the way through but we're through a lot of that and I think that.

Our sales organization have a lots of sell down we built out the product line a lot.

And I think we'll be we'll be able to make larger sales to customers on which will make higher margins have lower churn.

You can see it when you look at that quality metric beginning to really settle in and move in.

Don't focus as much on the absolute gross customer amount I'm focused on building that quality metric because theres a little bit of noise in our base from some of those conversions. So.

Anyway.

That hopefully gives you some sense for that.

The vertical strategy Jason.

It gives me great sense. Thanks, Joe appreciate it.

Your next question comes from the line of Arjun Bhatia from William Blair. Your line is open. Please go ahead.

Okay. Thank you. This is arlinda Lee on for Orange embark yes, thanks for taking the question.

The board of.

CTO Shawn.

We're a little over a month now why do I say early strategies and reward to achieving operational efficiency product acceleration and also <unk>.

Innovation.

Yes.

AI I mean, he Sean.

John.

All AI all the time and.

The guys he is bringing in.

Our all AI all the time too.

Not that our team wasn't we were doing a really good job with AI, but he has taken it to another level I mean he is he is.

Focused on it and I think really inspecting what we expect making sure they have.

At the already all the tools that they want that they are using them looking at how they are using them.

So I expect the output of that to be as weak as we span across 2026.

The pace of development against our product roadmap I think will quicken.

<unk> quickening already we're doing a good job, but I think youre going to see it go faster and I'm excited about that because there are a bunch of things. These larger customers. We're working for working with are looking for.

That I think.

We'll be able to deliver quicker.

With this thinking this approach that he is bringing the second thing I'd say about Sean.

Is is <unk>.

Recent background with booming was all about integrations and making software worked together and as you move up market as we are now doing.

You must be able to work and play well with others. So you've got to be able to have interoperability because.

Going concern, even even one with 12 or 15 employees. It has some workflows it doesn't want to change them all in order to embrace your tool, even if you're tools great.

And so you've got to be able to dovetail with what theyre doing and.

As he is often.

Turning to me Joe This is a solved problem.

It's something we can handle to worry about and I just really appreciate that confidence there.

And John This is an incredible leader and he will he will lead.

Our tech organization in a way that.

I think will create high morale is sort of NPS scores. If you will he gets his morale scores when he leaves the team are exceptional.

And.

And I think we'll just have a SaaS or a roadmap with a bunch of happy campers and our development teams.

Awesome and western new vertical product and.

Home services are you approaching the product development.

As we all strive for HVAC, where you work with industry leader in the market.

And creating that product how should we think about just product roadmap in the future in terms of protocol plane.

Yes, I think it is.

As you know we've got these powerful.

Automation that are kind of.

If when if when if when processes and it's a question really of working with a leader.

In this space and understanding what best practices are what they do and once you get inside of home services, whether it's electrical or roofing they start to get to be pretty similar there can be some nuances around insurance or.

Some other details but.

There are a lot of similarities so you are not starting from scratch.

So that team are working hard.

I was talking to the leader of the team last night.

About.

The sales organization's ability to actually digest the pace that he thinks his team can run at and crank in these.

Verticals out so.

It is.

Chicken or egg problem initially we needed the verticals and now he is turning them out and it has a roadmap to turn them out maybe faster than we can train on them and absorb them. So that we're thinking about how to manage that and how to deal with that but.

Yes, so they just find it.

A strong business and spend time with them and map it out.

Thank you thank.

Thank you very much appreciate it.

Your next question comes from the line of Zach Cummins with B Riley Securities. Your line is open. Please go ahead.

Thanks.

Morning, I appreciate you taking my questions Joe I wanted to start off.

Just a little more focused on these answers based engines I know, it's been a big concern for many publishers and small businesses around visibility of their web site within this evolving dynamic. So can you talk a little bit more about what price is doing to make sure that your customers are remaining visible within these answers based engines.

Alright, Thats great. Yeah, we spent a lot of time understanding.

What the answer how the how the answer engines operate well what makes them bring back results and so on.

Im not.

Today, you're going to go through every detail of that with you but.

All in all we think it's a really good thing for us, it's a tailwind for us because remember.

We have been competing with Google for years.

If you go back 20 years, we had more traffic than Google did we were the giant thing with yellow pages dot com in Dx nodes and Super pages.

We had these big sites and we still have these big sites. They still have a lot of traffic, but overtime. Google spent a lot of time trying to compete with us and basically.

Take away as many of those as many of those references as they could.

And all of a sudden with the answer engines.

Google's just hammerlock on all things search is broken.

And they are they the majority for sure it's still the majority.

But now these answer engines, often go and they look at yellow pages dot com or dex knows or Super pages are similar sites in New Zealand, and Australia, and they bring those authoritative answers back out of that content.

Not getting it from Google and Google can't have any influence on what that search result is so.

We've got.

The Bill is a pioneer in the Internet age sites of these online yellow pages directories with with various arete to very detailed very rich content about small businesses in Tupelo, Mississippi Rapid city, South Dakota that never really embraced Google.

And those answers are popping right up in these answer engines, which is awesome for us, allowing us to deliver more value than we might have without this so thats good.

Then secondly.

Remember, we build and host websites for people, some 54000 or something like that at the moment.

And more coming in everyday.

And we're really good at this we understand how to create.

Sort of a knowledge graph in a way that the answer engine is looking for it.

And we understand how to do.

Answer engine optimization and to make sure that everything about the way we present, the small businesses information both on their site and even oxide. If we're working with them in social or some of the other listings management areas that we care for customers in some of our add ons.

And we can optimize them and help them do better and that story I mentioned briefly about the partner who had the dentist.

In addition to just.

Going with thrive. He had also authorized doing some of these extra things in that 'twenty seven leads overnight with like a shot for that Guy. He was really excited about it because he basically turn the spigot on and let US do our thing and the answer engines are a part of our thing now.

No.

I would say if you offered me a world where I had the answer engines or not I mean, I would take them all day and twice on Sunday I mean, it's really been great for us.

I don't mind, Google loosening their grip, just a little bit on everything.

Okay understood and my one follow up question is just around balancing alright for expansion with looking.

Looking for ways to continue to grow the customer base.

Obviously <unk> expansion has been the bigger driver here in recent quarters and it looks like that's going to continue to be the case as you get more quality customers within that SaaS customer base can you just give us a sense of.

Maybe when we hit that inflection point and we start to see stabilization in that gross customer count and maybe you are getting a little more.

<unk> contribution from both customer growth and market expansion.

Yes.

It's.

We have a.

A bunch of very specific initiatives underway.

Two.

Build our business outside of Brazil.

But if we were just to rush out there naked and try to do it we would be just like any other software company.

We'd be dealing with.

Cost of acquisition.

<unk>.

Didn't play well with the lifetime value.

So we've.

We've had a real.

Almost unfair advantage by having this gigantic customer base that people like us who would take our phone call and talk to us and we are leveraging.

And so let me answer your question. This way if we started let's just say we didn't add any customers. We just replace churned customers and just hung out where we are.

We can still take this business from that.

Whatever it is little less than $500 million revenue, we're running at right now to eight or $900 million revenue just by just by doing what we've talked about growing the <unk> and the base. So we have youre going to see us grow very strongly and do a very good job.

Even before we add anything and then in terms of adding.

We're obviously managing the economics of the adding making sure that the.

The model of our <unk>.

Cost of acquisition to lifetime value is right and when you make larger sales to a little bit larger businesses.

That's all a lot easier.

So we're working on processes internally to do that but I would say.

At the moment, we're not pushing really hard for really any sub growth in the next short period of time in the next few quarters, we're getting strong growth by making sure all those customers that we brought over are getting visits a lot of cases in person visits or.

In some cases could be online visits and visits but we're spending time with them, making sure. They understand what they have and talking to them about their options to do more and that's super productive for US right now our sales force is really happy because they're writing a lot of business doing that.

So we don't have an emphasis on pushing that number up I wouldn't be in your modeling.

Saying, we're going to put huge gains in the short run on that base I think over the long haul we will but in the shorter run right now we're pretty focused on.

Bedding down and engaging in growing the ones that we brought over.

Understood well, thanks for taking my questions. Thank you.

Your next question comes from Matt Swanson with RBC. Your line is open. Please go ahead.

Oh great.

Great. Thank you guys for taking my questions.

Really appreciate the quality of SaaS client metrics, new disclosure as you mentioned, reducing a lot of that noise can you just talk a little bit more maybe as a follow up to that last answer of the trends youre seeing within that cohort, especially now that we've gotten to 77% of the client base.

I'm sure it would be that that group is going to start to be much more broadly reflected in our business results. Overall, so just kind of trends that youre seeing in that group relative to the overall business.

I'd love to and I really amount I appreciate the question because it's really at the heart of this.

I think sometimes people look at our business and they have a hard time really perceiving it because it's in transformation and Youll see the topline revenue bounces around based on the pub schedule.

Within the print business as it runs off.

And then there are customer basis.

<unk> groups in some cases that came over in clumps, some of which are pretty far below the.

The spend levels that we're spending time with our field sales force and so it creates noise in the numbers and you're like okay. What's the pattern here and so I think if you look at these customer spending $400 or more.

They tend not to be solo printers, they tend to be busy.

<unk> with.

Multiple employees and a little bit of billings, there actually kind of real companies and so.

They tend to churn less.

And their willingness their interest their ability to buy more tools from us buy more software from us and utilize it is greater.

So we find we're able to talk to somebody in the business is managing the marketing or managing the software and we're able to work.

Work with them and talk with them about that so that's very rewarding for us and.

A lot of times. These businesses are also succeeding they themselves are growing and so year over year over year. They have more revenue they have more resources and they have a greater ability to buy more and it's a virtuous circle where.

Our.

Offerings are helping them get leads and grow and build their order book and with that growth. They then can buy more stuff.

We're getting more and more employees than they can put them on workforce center and all these other kind of virtuous circle things. So that's.

Thats pretty much what we talk about everyday in the company and what we're working on is these these customers that we're actually able to spend time with and work in.

We have kind of a little bit of a.

Sort of.

Written rule, but we're trying to service.

Those very tiny customers through online channels and chat and so on and really not spend as much.

Time with them because it's obviously our time at Super expensive. So we're spending time with the larger businesses.

Where we think there's upside to growth so.

I think you will see over the over the coming quarters.

Quality metric is.

Is what we've accomplished.

And youre going to see that things steadily building and theyre buying multi product.

Their spend levels are good their churn levels are fairly low and I think youll see us building on that and that's really the.

The core of what we've established here through this process.

That's really helpful. And then I just wanted to kind of combine two comments that we made earlier in the call at one point, we were talking about there are some regions that you're in the F&B space never like fully adopted things like Google and now we're rolling out.

AI optimized search.

Just I was curious about.

Firstly to develop the products and then also how do you go to market with some of this.

Brand, new cutting edge technology businesses that might be a couple of generations behind technology wise and really letting them know alright perceive kind of what the value to that and it's going to be from us.

We were just talking about this yesterday you don't go around walk in they're talking about.

Uh huh.

Automation and AI and blow in their mind, you make it pretty simple.

And.

You talked to them about their ads in listings in the directories.

Making sure they are right, making sure their listings are correct all across the web making sure they have a good hygiene.

<unk> website and a good foundation you keep it all pretty basic and straightforward but.

That AD in the old days for the.

Tomato sauce ragu, it's in there and they used to say it's in there.

If they have questions about any of these latest things you can explain it is in there I mean AI is right in there and it's available, but we don't lead with that.

Intimidated customer really quickly with a bunch of acronyms and throwing around all kinds of fancy terms. So we try to build it up off of a foundation and marketing Center is an amazing Foundation.

For a century people have been saying.

I know a lot of my advertising is wasted I don't know I don't know what it is and within marketing Center you could tell exactly what works.

We were able to put call tracking numbers on offline things online things everything you do you can take a look at heat maps via website bounce rates.

Your web site you can put widgets on your website chat tools.

Every which way somebody can come at you, we can measure it and facilitate it and improve it through marketing center and.

For.

A lot of people the money they spend on outreach to try to make the phone rang and bring in more leads is near and dear to them and.

The promise of having a way to optimize it.

And measure it and then tie it back to their order book.

Even for somebody.

<unk> City, South Dakota, that's something that's an exciting prospect and we just try to keep it.

Keep the jargon out of it and remember we've got a guy that's been in rapid city, South Dakota for 140 years maybe.

Maybe not that exact guide, but as a company we have.

We started at $18 86.

So we have that relationship where there were already working with them in those flyer replaces we do really really well in those via replaces.

There are no further questions at this time.

This concludes today's call. Thank you for attending you may now disconnect.

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